Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Thursday, March 11, 2010

Revitalizing China's Rust Belt

Rust Belt cities reap what they sow. Bad policy. Corrupt politicians. High taxes. Lousy schools. Parochialism. The list is endless. Most of the opinions on the matter are misplaced and useless. Everywhere you look, and I mean globally, the tale of woe is the same. In China:

Coal once employed 60 percent of its total workforce, but after decades of overmining, the huge Haizhou mine in the center of the city finally ran dry and was declared bankrupt in 2005.

Its air already thick with sulphur, Fuxin was now also struggling with crippling rates of unemployment, and thousands of residents had to evacuate as geologists worked to prevent the estates built on the mine's banks from collapsing.

The plight of Fuxin, a tough, ramshackle city built around the biggest open-cast coal mine and largest thermal power plant in Asia, helped gather the momentum to launch the country's 2004 campaign to "rejuvenate" the moribund mining regions of the industrial northeast.

Located on the chilly frontier between Liaoning and Inner Mongolia and designated one of China's 44 official "resource-depleted cities", it was the site of a pilot government "diversification" programme in 2006, Pan said.

"We have achieved a lot in the four years since, but this is a long historical process -- Germany's Ruhr Valley, England's Manchester and Pittsburgh in the United States are typical resource cities that have already completed their economic transformation, but it took them more than 50 years," he said.

Given the economic history, urban revitalization doesn't get much better (if at all) than Pittsburgh. Among Rust Belt cities, there is a range of development. The geographic context makes little difference. The agency is limited.

That's not to say that Pittsburgh is above reproach. Just that some of the more scathing criticisms aren't grounded in reality. The benchmarks are idealistic, not pragmatic. The grass isn't greener elsewhere.